US consumer sentiment topped estimates in March

A customer bags his groceries after shopping at a Walmart store ahead of the Thanksgiving holiday in Chicago, Illinois, U.S. Nov 27, 2019. REUTERS/Kamil Krzaczynski/File photo

U.S. consumer sentiment rose unexpectedly in March to the highest in nearly three years thanks in part to growing confidence that inflation will keep softening.

The University of Michigan’s benchmark Consumer Sentiment Index rose to a final reading for the month of 79.4, the highest since July 2021, from February’s 76.9. It topped consensus estimates of 76.5 in a Reuters poll of economists, which had been the same as the preliminary March estimate released two weeks ago.

Consumer assessments of both current conditions and the economic outlook both improved from the March mid-month and February final readings.

READ: Mixed US consumer price revisions leave slowing inflation trend intact

Expectations for inflation over a one-year horizon declined to 2.9 percent from 3 percent in February to match January’s reading, which had been the lowest since December 2020. Over a five-year horizon, consumers saw inflation easing to 2.8 percent from 2.9 percent last month.